The case for a centennial monetary commission.

• Author: Brady, Kevin P.

By every economic measure, our nation is presently mired in a disappointing economic recovery. In fact, ours is the weakest recovery of the past half century. Uncertainty reigns as the purchasing power of the dollar declines. What ails us goes well beyond federal fiscal policy, and it is certainly not the result of an irrational marketplace. What ails us goes much deeper to our nation's monetary policy, which is well overdue for a review.

The Growth Gap

In tracking our economy, the Congressional Joint Economic Committee, which I chair, has highlighted a disturbing and growing trend, which we refer to as "the growth gap." The growth gap can be seen as the gap between where our economy is today compared with where it would be if we had experienced an average post-1960 recovery.

How large is the growth gap? In the near term, as of January 2014, we are missing $1.21 trillion of real GDP from America's economy, and missing 4.4 million private sector jobs, just from an average recovery. If you compare the current disappointing recovery with the robust Reagan recovery, the figures are even more startling: $1.84 trillion in lost output and 6.95 million private sector jobs missing from our economy.

In the long term, the numbers are even more dismal. Last year, the Congressional Budget Office reduced its estimate for future growth in potential real GDP from 3.2 percent to 2.2 percent. A 1 percentage point difference may not sound like much, but it is huge. Over the long term, a 1 percent growth gap is the staggering difference between a $50 trillion economy and an $80 trillion economy that is 60 percent bigger in 2062.

These are big numbers, and it is often difficult to translate such numbers into digestible bits. So, what exactly does the growth gap mean for American families? To the average family of four today, they are missing more than $11,000 from their real disposable income that could go toward their housing, dreams, and education, or even pay for higher health care costs under the Affordable Care Act. This is a big hole, and too many families have been left behind in a major way.

Wall Street has done well in this recovery. From the end of the recession through November 2013, the S&P500 Total Return Index was up 100.8 percent. I want to see Main Street do just as well. Among our problems right now is that our current monetary policy has tilted the playing field in favor of Wall Street and away from average working families in America.

The Fed's monetary policy, in my view, has harmed American families. Keeping the federal funds rate at the zero bound for the past five years and building excess liquidity on the Federal Reserve's balance sheet from quantitative easing have kept interest rates at extremely low levels for a long time. The Fed's policies have discouraged...